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Samsung subsidiary opens China resin plant

By: Nina Ying Sun

June 10, 2014

Cheil Industries, a producer of ABS and polycarbonate resins under Seoul-based Samsung Group, has opened a new facility in Dongguan, Guangdong province.

Dongguan Samsung Engineering Plastics Co. Ltd., with a brand new 22,000-square-meter plant, currently runs four production lines that add up to total annual capacity of 27,000 tons of engineering plastics, the company said in a news release. It will supply to downstream industries such as information technology, automotive and appliances.

Cheil defines its engineering plastics portfolio as polycarbonate, polycarbonate alloys, and “super engineering plastics” on its website. However, the Dongguan unit described itself as a manufacturer of ABS and PC resins in job ads it has posted. Cheil did not immediately reply to Plastics News’ email request for clarification on the specific products in Dongguan.

The new production base in South China is part of a trio of plants that Cheil has built to serve the Chinese market, the company said. The other two plants are located in Tianjin in North China (24,000 tons) and in Yeosu, a seaport in South Korea that supplies to East China (240,000 tons).

“We have improved our competency to supply the Chinese market by securing a production base in Southern China, the largest market in China,” said Cheil Industries CEO Nam Seong Cho.

The company said it now aims to “attack Chinese market in full scale” with the “just-in-time supply system by region.”

The local government said in an online statement that the plant was officially opened on May 29. As the first phase of a biggest project, it is estimated to generate 780 million yuan ($124.8 million) in annual sales.

The government noted that the project has set a new record for a foreign-invested greenfield factory construction in Dongguan. It took 8 months from the signing of the project to the start of the trial production.

Cheil Industries recorded 2.8 trillion South Korean won ($2.7 billion) in operating profit from its chemical business out of gross sales of 4.41 trillion won ($4.26 billion) last year.

The company said it saw the demand for basic materials suddenly drop in the four quarter, but it managed to turn around in the first quarter through cost reduction and expanding sales of value-added products.

Sales in the Chinese market account for about 30 percent of the company’s gross sales.